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Analysis

Apple, Facebook's Primary Care Provider Acquires Sherpaa: 4 Lessons for Health Systems

By Mandy Roth  
   March 12, 2019

Crossover Health closes a deal that creates an innovative healthcare delivery model for self-insured employers and presents opportunities for health systems.

Crossover Health, a San Clemente, California­–based provider of comprehensive health services for self-insured employers, has acquired the digital health platform of Sherpaa, a virtual primary care provider headquartered in Brooklyn, New York. The deal was finalized on February 26, but the terms of the deal have not been disclosed.

Another day, another technology acquisition? Possibly not.

A closer look behind the scenes of this deal between two privately held companies reveals an innovative healthcare delivery model and presents opportunities for health systems to work with some of the nation's largest self-insured employers. Apple, Facebook, LinkedIn, and Intuit are among Crossover's stable of clients. These companies do not have the same restrictive practices as traditional payers.

Further fueling curiosity: Last October, Apple—which is actively expanding its healthcare strategy—was rumored to be interested in acquiring Crossover Health. Although the deal never happened, the attention could signal the potential power these arrangements between providers and self-insured employers might have down the road.

Beyond partnering with Crossover Health to provide specialty care and other services, the model itself might be something health systems want to emulate. In addition, some health systems with their own plans to provide primary care services to the self-insured market might view Crossover Health and similar companies as a competitive threat. Here are four things this acquisition can teach providers.

1. Create a care model that combines in-person and digital care
 

Crossover Health provides on-site and "nearsite" primary care health services to large, self-insured employers. One unique aspect of their approach is that these clinics provide a "defined care team for a defined population," says the company's CEO and co-founder Scott Shreeve, MD. Rather than marketing to a broad base of patients who may come and go, he says, this arrangement helps build long-term relationships between care teams and the individuals they're serving.

Physicians and nurses comprise the backbone of the primary care team, and on-site services are supplemented with physical therapy, chiropractic care, acupuncture, behavioral health, health coaching, and fitness. Some clinics offer optometry and dental services as well. Annual exams are allotted 60 minutes; follow-up appointments are 30 minutes in length.

While Crossover Health says that its "patient-centered, outcomes-based care delivery model has helped these large employers reduce their overall health care costs, keep their employees happy and healthy, and provide a valued benefit" to employees and prospects, an increasing number of these employees—about 80% says Shreeve—work remotely. Adding virtual care capabilities has become essential to the strategy.

Shreeve says that about 70% of primary care does not require an in-person visit.

"More healthcare services will be moving online," he says. "We want to be a part of that. That's what our clients are demanding. And we certainly see the employees and the members that use our services asking for more stuff to move online as well."

By incorporating Sherpaa's technology platform into Crossover Health, the same care team concept will be used to provide remote care. While some services like acupuncture and dental care cannot be offered digitally, certain aspects of physical therapy, for example, can. "It's really creating a connected system of health for our employers who have populations [located] throughout the country."

And, much like what is happening in the retail world, he says, "it's the combination of the digital and the physical that makes for a great experience and becomes very seamless for people. We think the combination of in-person, online, and anytime is what consumers and employers are looking for."

2. Focus on asynchronous remote care
 

Sherpaa specializes in asynchronous communications between providers and patients. Similar to texting or email, this form of communication allows a thoughtful exchange of information over time, rather than forcing a visit into a limited, real-time exchange. In an era where many healthcare interactions seem to be moving in the direction of real-time video, Shreeve contends that the asynchronous approach fosters long-term relationships, offers advantages that enhance the healthcare experience, and promotes efficiency.

While real-time video or phone consultations are currently available with doctors, Shreeve says that few patients choose this option. If the need for more direct consultation occurs, it usually results in a phone call, not a video chat.

Sherpaa's system generates structured questions and responses, enabling each provider to concurrently interact with multiple patients, just as one might text multiple parties simultaneously. It also does not compress the visit into the short time frame currently allotted for most current video visits. Patients have time to get all their questions answered and can ask follow-up questions to the same practitioner, even days or weeks later.

The Sherpaa system also prescribes "definitive or discrete care plans with actions for members to take," says Shreeve. The structured questions and care plans set this mode of communication apart from other solutions, he explains, and were part of the reason Crossover Health found Sherpaa an appealing acquisition.

3. Be aware that the self-insured market is growing
 

Many large employers are self-insured, a practice in which the company assumes its own claims risk, but often uses an outside entity to manage and administer benefits. Due to market changes, in recent years this approach has become more appealing to mid-sized and even small companies. This trend is on the upswing and presents opportunities for health systems and other providers.

"There is a dramatic expansion of self-funding products and solutions entering the marketplace, all with the express focus of addressing the challenges of affordability for small and mid-sized employers," says Mike Sullivan, chief growth officer of OneDigital, a company focused exclusively on employee benefits and HR. Not only are traditional employers gravitating to this concept, so are associations, Professional Employer Organizations, and chamber plans, he says. "The maturation of technologies, risk management solutions, and advisors with acumen and scale are leading this expansion of self-funding solutions nationally."

Besides the growth of this market, there are other advantages. Self-funded companies don't have the same requirements and restrictions as other payers, and they tend to be nimbler and more innovative.

"We think the most innovative payer is the employer, and that's why we've chosen to work exclusively with them," says Shreeve. Among the firm's 30 clients, 23 are Fortune 500 companies and eight are the largest companies in the world.

"They value things differently," he says. "They still expect a lot of value, they expect a lot of service, but they're different than traditional payers. Getting paid directly by them allows us to innovate in totally different ways, and we're not stuck on the fee-for-service treadmill trying to chase down CPT codes and optimize billing. We don't need the whole billing apparatus, so we get to focus on … creating more value for our client and demonstrate that the outcomes we're achieving are differentiated and deliver on what we commit to in terms of the cost and quality metrics."

This approach is not only "liberating for us as a company," says Shreeve, but also for providers.

Sherpaa also focuses on self-insured employers and members of health plans, as well as individuals. According to Shreeve, its typical client has between 50 to 250 workers or members, although recent customers include companies with 4,000‒5,000 employees.

Crossover Health's acquisition included Sherpaa's customer base and providers. 

"It's a nice market diversification strategy for us," says Shreeve," and we're looking forward to supporting and serving that population."

4. Be open to partnership opportunities
 

Shreeve does not view his company as a threat to health systems; in fact, quite the opposite. "We 100% rely on health systems as our partners. We're focused on primary care and some of the ancillary specialties associated with primary care. We always need specialists and great hospital partners," he says.

For some health systems, "Primary care is a little bit of a throwaway or it's a feeder to other things," says Shreeve.

Health systems that rely on that feeder concept may view things differently, particularly those who see the advantages of directly working with self-insured companies and their patient populations. Nevertheless, as companies like Crossover Health increase their market share, it may behoove health systems located in those regions to explore partnership arrangements.

"We think primary care can have a much more foundational role in the health system," says Shreeve. Partnerships with companies like his "provide an innovative way to engage with a large … educated patient population that can then be better consumers of the health system."

Common goals related to reducing costs, improving quality, enhancing patient engagement and care coordination, and navigating the health delivery system offer opportunities for connection, Shreeve says. "We're hoping to partner with health systems to send our patients there and come up with novel ways to use this asynchronous technology … and the relationships we have to provide even better care and care coordination."

Mandy Roth is the innovations editor at HealthLeaders.


KEY TAKEAWAYS

For primary care, a combination of in-person and digital services available anytime is what consumers seek.

Asynchronous remote care promotes efficiency, enhances the patient experience, and fosters long-term relationships with the same provider.

Self-insured employers are growing, offering opportunities for much more flexible payer arrangements.


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